[DRSpeed85]

Being both a business major and an active headfier, I often think of the economics involved in this forum. I've been active in this forum for quite a while now, but I realise that the total sum of the money I spent is considerably less than I have initially thought. Clearly, there are headphones, amplifiers and sources that are flying around in the FS section from user to user. If you have the money to purchase what you want, you might as well get it after "suffering" upgraditis. But the thing is, the depreciation rate for these equipment is so stable that in the long run, you are merely paying a lease. Depreciation is the biggest factor here in head-fi economics. Lets say you purchase a GS1000 that costs about $850 in the FS section nowadays. You cough up the dough and purchase it. Then you are present with two options. Keep it, or sell it at a price within 90% of the original sum you paid. Now, this depreciation rate seems to be constant from equipment in varying price levels. For instance for a Koss KSC75, the depreciation would be a few dollars, an RS-1, a few tens, for amp or source costing thousands, hundreds.

It actually seems worth spending big bucks in this hobby as long as we stay within the cocoon of this fantastic forum than say spending similar money on high fashion, a laptop or car modification parts which pretty much depreciate instantly. So far, the single most quickly depreciating equipment I bought for this hobby was my iPod. Now I notice that my gf is losing so much more money than my headphone hobby. She has a closet half full of branded shoes that have near instant depreciation. In high fashion, if you buy a certain item that is bang up to date to that season's trend, it depreciates at incredible pace once that season passes. (this is the case in America and Europe, but not much so in Asia) Just think where all those black/pink combos went that were so popular two winters ago. Similar story with a friend of mine who constantly upgrades his gaming pc. According to him, he spent in average $1000 every year to keep his computer up to date because gaming PCs become "last gen" every 3 months or so. Just don't ask him why consoles are inferior to gaming pcs.

I'd also like to add that because we earn money quicker than the depreciation of our equipment, upgraditis is quite surprisingly, natural because any money we spend would be added to the value of the equipment you have. The total value just keeps on accumulating. For instance, if you have a brand new $100 headphone and keep in it good condition, decide to sell it a few months later at $80 and spend another hundred on it, you've got $180 right there. By comparison my gf's many $100 shoes depreciate within a few months and she'd buy another pair by then.

Just a small thought really in regards to the economics involved in this hobby. Musical bliss is afterall priceless isn't it?

 

[digitalmind]

This is very true. The very low depreciation of value in this hobby is the only thing that makes this otherwise very expensive hobby possible for a student like me. To know beforehand that I won't loose much money on a headphone makes it a great buy for me. Buying a new PC or some other electronical toy will depreciate so much faster and that ultimately spoils the fun.

 

[cconroy]

i don't have much to add other than to say nice post!

 

[GlendaleViper]

Very interesting post!

It's funny this comes up, as my thoughts early in my Head-Fi journey insisted I must be surrounded by rich people on these forums. After a few months, I start to recognize the most fortunate members are heavily (see: monstrously) outnumbered. The point was driven home when I started to look at the FS forums... we're just normal folks with an expensive hobby!

Not only has this made me a little more comfortable, but it has (much to my chagrin) presented a new found confidence in my purchases. It goes something like this:

1) Save up for what you think you want - all research and common sense still applies.
2) Make your purchase and take some time to get to know it. Let the honeymoon period wear off, and decide if it truly fit the bill.
3a) Keep your amp until upgradeitis bites and either add to the collection or sell the soon to be replaced piece.
3b) Sell the unit as soon as possible if it doesn't work for you. The resale typically ends up in a 10-15% loss (rental fee).
4) Lather, rinse, repeat.

Personally, I have yet to build up multiple rigs. I spent this year building my (now complete) portable rig and my (almost complete) home rig. I can see myself keeping most of what I end up happy with, especially headphones. I can also see myself keeping a small repertoire of amps for synergy's sake.

When it comes down to it though, I really don't see this as quite the money-pit as I did originally. As with all hobbies, you can expect to invest a lot of time and money, and audio can be about as expensive as they come. What's nice is there seems to be a security blanket that states "don't worry, if you're not happy, you'll get your money back."

We all know we're going to spend money on this stuff. The fact that most of us are willing to swap around and make the whole ordeal easier on our ears and wallets just makes it that much more satisfying.

To steal and alter a slogan we're all familiar with: Buy with Confidence!

 

[Jam_Master_J]

Despite going through two amps and 3 headphones in the last year, my total investment in that period has been less than $100 thanks to most of the components not depreciating much in markey value.
w00t, post 1500

 

[braillediver]

I've found- If you shop wisely, spend way too much time here, buy from a known member, take really good care of the gear and buy the upper highend you're only real loss can be shipping (at most).

A pair of RS-1's for $500 can be sold for $500.


There are few other hobbies I'm aware of that can be as inexpensive as Head-Fi.


Mitch

 

[TopShelf]

Nice starting post


On top of this, you have the other economic factor, which is time invested, for the money spent. So if you guy a pair of headphones, for 500 bucks, and you spend 2 hours a day, being entertained by them, and yet you can sell them for 450 in a year, it can't get much better then that.

You take a tv lets say, at 2500 bucks, for 2 hours a day of use, and in a year, your looking at being able to sell it for 1000 bucks? 1500 bucks

When the average movie costs 20 bucks, for a ticket and popcorn, to keep you entertained, and you get nothing in a return, I think high end audio is a smart way to go lol

 

[hYdrociTy]

Somehow, after reading this post, my brain twitched, and so did my wallet. but for opposite reasons.

 

[Uncle Erik]

Who said anything about selling gear?

I thought we were supposed to keep buying and buying. At least I have.

OP makes a good point, though.

 

[zachary80]

This is not what I need to hear right now

I'm happy with my system. I'm happy with my system. I'm happy with my system. I'm happy with my system.

Thirst for an upgrade temporarily quenched

 

[saint.panda]

Good point about mere leasing. I read an article a few months ago that a big chunk of future consumer good transactions will be based on mere leasing rather than actually owning certain goods (just like the Patek Philippe advertisements have always claimed). When buying something, people instinctively include the resale value into the decision-making process, which is probably why custom IEMs don't sell nearly as good as equally expensive but non-custom headphones.


And good point about capital accumulation. It's really what keeps this hobby going for us and the manufacturers. In fact, some manufacturers take advantage of this by simply offering you an upgrade on your existing gear, either by letting you send in your old stuff or by releasing a newer version that is so overwhelmingly better that you just have to have it. This also take into consideration the behaviour pattern of audio consumers who always seem to strive for change because having heard your favourite CD 50 times on the same amp just won't cut it anymore.

 

[james__bean]

There's actually a little more fluctuation to the depreciation of items in the FS forums than has been acknowledged. If you make smart buying decisions and sell at the right time, sure you can stay within that 10-15%. But take the SA5000's for example. At the prime of their FotM status, you could buy them for $380 and sell them for $325-350. Now you can buy them new for $370, but used I've seen a few postings of $250-275 shipped. If you hold on to equipment too long it generally goes down quite a bit in price. Alternatively, if you hold on to it and keep your equipment in good condition, once said item is replaced with a new model you can sometimes sell it for more than you paid for it. CD3000, W2002, etc.